🔢 Key Value Stream Metrics

1. Lead Time

🕒 Definition: Total time it takes from the moment a request is made to when it is delivered.

Formula:
Lead Time = Waiting Time + Processing Time

Example:
Customer orders a burger at 12:00, receives it at 12:10 → Lead Time = 10 minutes

2. Cycle Time

⚙️ Definition: Actual time spent working on a task (excluding wait/delay time).

Formula:
Cycle Time = Touch Time (active work time only)

Example:
It takes 2 minutes to cook a burger once it's started → Cycle Time = 2 minutes

3. Takt Time

🧮 Definition: Maximum time available to produce one unit based on customer demand.

Formula:
Takt Time = Available Time / Customer Demand

Example:
If a restaurant is open for 480 minutes and needs to serve 120 customers →
Takt Time = 4 minutes per order

4. Process Efficiency (%PE)

📈 Definition: Ratio of value-adding time to total lead time.

Formula:
%PE = (Cycle Time / Lead Time) × 100

Example:
If Lead Time = 10 min and Cycle Time = 2 min →
Process Efficiency = 20%

5. Throughput

🚚 Definition: Number of items/services completed in a given time frame.

Example:
A fast-food kitchen completes 200 orders per hour → Throughput = 200/hour

6. Wait Time / Delay Time

⏳ Definition: Time a task/item spends idle before work starts or between steps.

Example:
Order sits in queue for 5 minutes before it's prepared → Wait Time = 5 min

7. First Pass Yield (FPY) / % Complete & Accurate

✅ Definition: % of items completed correctly the first time without rework.

Formula:
FPY = (Correct Outputs / Total Outputs) × 100

Example:
90 out of 100 burgers are made right the first time → FPY = 90%

8. Work in Progress (WIP)

📦 Definition: Number of items being worked on but not yet completed.

Example:
5 orders are being prepared in the kitchen at the same time → WIP = 5

9. Flow Efficiency

🌊 Definition: Percentage of time an item is actively worked on compared to total time in the process.

Formula:
Flow Efficiency = (Active Time / Total Time) × 100

10. Queue Time

📉 Definition: Time an item waits in a queue before the next process starts.

Example:
A customer waits 3 minutes at the pickup counter after the order is ready → Queue Time = 3 minutes

1. What is the primary objective of Value Stream Mapping (VSM)?

A. Increase marketing reach
B. Visualize and improve the flow of value in a process
C. Improve employee satisfaction
D. Reduce inventory holding costs

✅ Answer: B

VSM helps identify value-added and non-value-added steps to improve process efficiency.

2. Which of the following is NOT a typical metric used in VSM?

A. Lead Time
B. Cycle Time
C. Bounce Rate
D. Takt Time

✅ Answer: C

Bounce Rate is a digital marketing metric, not used in VSM.

3. What does 'Takt Time' represent in a value stream?

A. The total time taken to complete a process
B. The time taken to build one unit
C. The time available divided by customer demand
D. The wait time before processing starts

✅ Answer: C

4. Which of these best describes 'Cycle Time'?

A. Time a task waits before processing
B. Total end-to-end time
C. Active time spent working on a task
D. Time lost due to rework

✅ Answer: C

5. In a value stream map, what does a triangle symbol typically represent?

A. Process step
B. Customer
C. Inventory or delay
D. Rework

✅ Answer: C

The triangle is often used to show inventory or a waiting point.

6. First Pass Yield (FPY) measures:

A. The total number of tasks completed
B. The number of people required per task
C. The number of outputs done right the first time
D. The number of returns

✅ Answer: C

7. Which of the following is a benefit of Value Stream Mapping?

A. Makes hiring decisions easier
B. Reduces project documentation
C. Identifies waste in the process
D. Improves branding

✅ Answer: C

8. What is the first step in creating a Value Stream Map?

A. Calculate inventory levels
B. Design the future state
C. Identify the product or process family
D. Implement lean tools

✅ Answer: C

9. What is considered a "value-added" activity in a value stream?

A. Re-entering data due to a system error
B. Waiting for approval
C. Packaging the finished product for delivery
D. Moving files between departments

✅ Answer: C

10. Which Lean principle does Value Stream Mapping most directly support?

A. Respect for people
B. Pull system
C. Continuous improvement
D. Identify value

✅ Answer: D

1. A process takes 2 minutes to prepare, 1 minute to package, and 2 minutes to deliver. There is a total wait time of 5 minutes. What is the lead time?

A. 5 minutes
B. 3 minutes
C. 10 minutes
D. 6 minutes

✅ Answer: C
Explanation:
Lead Time = Cycle Time + Wait Time = (2 + 1 + 2) + 5 = 10 minutes

2. A team has 400 minutes of available time in a day and must deliver 100 orders. What is the Takt Time?

A. 2 minutes
B. 4 minutes
C. 5 minutes
D. 6 minutes

✅ Answer: B
Explanation:
Takt Time = Available Time / Customer Demand = 400 / 100 = 4 minutes

3. If a process has a Lead Time of 12 minutes and a Cycle Time of 3 minutes, what is the Process Efficiency?

A. 25%
B. 50%
C. 33%
D. 75%

✅ Answer: C
Explanation:
Process Efficiency = (Cycle Time / Lead Time) × 100 = (3 / 12) × 100 = 25%

4. A restaurant fulfills 180 orders in 3 hours. What is the throughput per hour?

A. 60
B. 90
C. 45
D. 30

✅ Answer: A
Explanation:
Throughput = 180 orders / 3 hours = 60 orders/hour

5. Out of 200 burgers made, 180 are correct on the first try. What is the First Pass Yield (FPY)?

A. 80%
B. 85%
C. 90%
D. 95%

✅ Answer: C
Explanation:
FPY = (Correct / Total) × 100 = (180 / 200) × 100 = 90%

6. A product spends 2 minutes in active work and 8 minutes waiting. What is the Flow Efficiency?

A. 10%
B. 20%
C. 25%
D. 80%

✅ Answer: B
Explanation:
Flow Efficiency = (Active Time / Total Time) × 100 = (2 / (2+8)) × 100 = 20%

7. A customer places an order at 12:00 PM and receives it at 12:09 PM. The order was being actively prepared for 3 minutes. What is the wait time?

A. 6 minutes
B. 3 minutes
C. 9 minutes
D. 12 minutes

✅ Answer: A
Explanation:
Wait Time = Lead Time - Cycle Time = 9 - 3 = 6 minutes

8. A factory runs for 480 minutes/day and must produce 240 units. What should be the ideal Cycle Time per unit?

A. 1 minute
B. 2 minutes
C. 3 minutes
D. 4 minutes

✅ Answer: B
Explanation:
Cycle Time = Available Time / Units = 480 / 240 = 2 minutes

1. A company maps out its order fulfillment process and finds that 70% of the total lead time is spent waiting for approvals. What is the most effective next step?

A. Hire more staff
B. Eliminate value-added steps
C. Analyze and reduce approval delays
D. Increase production capacity

✅ Answer: C

Waiting is non-value-added. Focusing on approval bottlenecks can significantly reduce lead time.

2. While conducting a VSM, you discover that a process step takes 30 seconds, but items wait in queue for 4 minutes before that step. What does this indicate?

A. The step is overstaffed
B. There is excess inventory
C. There is a flow inefficiency
D. The process step is too slow

✅ Answer: C

High wait time relative to processing time reveals poor flow and possible overproduction upstream.

3. Your VSM shows a cycle time of 2 minutes, but customer demand requires one unit every 3 minutes. What does this indicate?

A. You are underproducing
B. You are overproducing
C. You are meeting takt time
D. You have idle workers

✅ Answer: B

If cycle time < takt time, you're producing faster than needed, which leads to overproduction.

4. After mapping the value stream for a software development process, the team finds that rework is 15% of the total effort. What metric would best help monitor this issue?

A. Takt Time
B. First Pass Yield
C. Lead Time
D. Inventory Levels

✅ Answer: B

FPY helps track quality issues and rework frequency, making it ideal here.

5. A factory's current state VSM shows a lead time of 14 days and processing time of only 2 days. What is the process efficiency?

A. 7%
B. 14%
C. 12%
D. 25%

✅ Answer: B

Process Efficiency = (2 / 14) × 100 = 14%

6. You notice multiple process steps with large inventories between them in your current state map. What type of waste is this?

A. Overproduction
B. Waiting
C. Motion
D. Inventory

✅ Answer: D

Excess inventory between steps is a classic form of waste in lean processes.

7. A manager wants to reduce lead time but doesn't want to reduce the number of process steps. What lean strategy should they focus on?

A. Add more approvals
B. Increase work-in-progress
C. Reduce waiting times between steps
D. Add more features to the product

✅ Answer: C

Reducing delays between steps improves lead time without changing process count.

8. In a future state map, your takt time is 60 seconds, but one station's cycle time is 80 seconds. What should you do?

A. Do nothing, it's balanced
B. Split the task or add capacity
C. Increase takt time
D. Move the station downstream

✅ Answer: B

If cycle time > takt time, you'll fall behind demand. Balancing or adding resources can help.

✅ Case Study: McDonald's – Optimizing Order Process with Self-Service Kiosks

🏢 Company: McDonald's

🏭 Industry: Quick Service Restaurant (QSR)

🎯 Focus Area: Order-taking process

📌 Problem

• Long queues at counters, especially during peak hours

• Errors in order taking (miscommunication)

• Slower service speed affecting customer satisfaction

• High workload for front-line staff

🗺️ Value Stream Mapping Approach

1. Current-State Map (Before Kiosks):

• Customer enters and waits in line

• Places order with cashier (prone to mishearing)

• Cashier enters order manually

• Payment processed

• Order sent to kitchen

• Customer waits for order

Identified Issues:

• Bottleneck at the cashier

• Rework due to incorrect orders

• Idle time for customers waiting in line

• High staffing need at the front counter

2. Future-State Map (With Self-Service Kiosks):

• Customer enters and uses kiosk to place order directly

• Customization is clearer and faster

• Digital payment processed at kiosk

• Order sent directly to kitchen system

• Customer receives ticket, waits, or is served at table (in some countries)

Improvements Identified:

• Eliminated queue at counter

• Reduced manual entry errors

• Allowed redeployment of staff to focus on food prep and customer service

• Enhanced upselling via kiosk interface (suggested meals/add-ons)

💡 Key Lean Principles Applied

• Waste Reduction: Eliminated waiting and rework

• Automation of Manual Processes: Order-taking digitized

• Flow Efficiency: Smoother customer flow

• Customer Focus: Empowered customers to take control of ordering

📈 Results

• Service speed increased by up to 30% in high-traffic stores

• Order accuracy improved significantly

• Higher average order value due to upsell prompts on kiosks

• Employee satisfaction rose with reduced front-counter stress

• McDonald's added AI-enabled kiosks for personalized suggestions

🔄 Continuous Improvement

• McDonald's gathers kiosk usage data to improve interface

• Adds multi-language support and accessibility features

• Further optimizes backend kitchen processes for order fulfillment

✅ Takeaway

McDonald's successfully used Value Stream Mapping to:

• Visualize the ordering process

• Eliminate bottlenecks

• Reduce waste

• Deliver faster, more personalized service

• Enhance both customer and employee experiences

Here's some quantifiable data linked to McDonald's self-service kiosk implementation that supports the value stream improvements — pulled from publicly available case studies, financial reports, and industry analysis:

📊 Quantifiable Improvements from McDonald's Self-Service Kiosks

⏱️ 1. Reduced Order Time

• Pre-kiosk (traditional counter): ~6–7 minutes total per customer (including queue time)

• With kiosk: Average order time reduced by ~1–2 minutes, depending on traffic

✅ Result:
→ ~20–30% faster order completion during peak times
→ Improved throughput per store

💵 2. Increased Average Order Value (AOV)

• Kiosks use AI-driven upselling ("Add fries?" "Upgrade to a meal?")

• AOV increased by ~20% after kiosk implementation

✅ Example:

• In France, test stores reported +20% higher AOV after kiosk rollout

• In the U.S., some franchisees reported $1+ increase per transaction

🤖 3. Increased Order Accuracy

• Manual order error rate (via human cashier): ~8–10%

• Kiosk error rate: under 2–3%

✅ Result:
→ Reduced rework and customer complaints
→ Lower food waste due to fewer incorrect orders

🧑‍🤝‍🧑 4. Better Labor Allocation

• Kiosks allow reduction in front-counter staff by 1–2 employees per shift

• Staff can be reallocated to kitchen or table service

• Does not necessarily reduce jobs, but shifts focus to high-value activities

✅ Result:
→ Improved customer service and table turnover
→ Better labor efficiency without hurting employment